Labor push for banking royal commission shut down by government

Minister heads off Bill Shorten’s motion with a new inquiry into small business lending practices

Labor has moved a motion to introduce a banking royal commission in an attempt to derail the government’s agenda on the first substantive day of parliament since the election.

But the government has shut the move down, pointing to a new inquiry into small business lending practices and other reforms to argue the royal commission is not needed.

Bill Shorten, the opposition leader, on Wednesday sought a suspension of standing orders in the lower house to call for a royal commission. The motion was seconded by independent MP Bob Katter.

Shorten said that scandals in the banking and financial services industry have gutted retirees’ savings, “rorted” families and resulted in life insurance policy holders being denied justice.

He cited examples including allegations of rate-fixing in the banking sector and insurance policies being denied for “having the wrong type of heart attack”.

“Despite several inquiries, new powers, new resources, and a financial ombudsman service, the rorts and the rip offs continue.”

Kelly O’Dwyer, the minister for revenue and financial services, announced on Wednesday the government has asked the Australian small business and family enterprise ombudsman to look at how banks treat their small business lending customers.

The ombudsman will report within 12 weeks and provide interim findings to the Ramsay review examining external dispute resolution schemes in the financial services sector.

The government shut down Labor’s call for a royal commission, successfully amending the motion to instead question why Labor had not instituted an inquiry when it was in government.

Coalition MP George Christensen, formerly an advocate for a bank royal commission, moved the motion.

He noted the Ramsay review – led by corporate law expert Professor Ian Ramsay – was under way and that the Australian Securities and Investment Commission had commenced prosecutions on the rate-rigging allegations.

Christensen pointed to government initiatives including increasing the resources of Asic and a new process to haul banks before a parliamentary committee to explain failing to pass on interest rate cuts.

“If a royal commission were to go ahead it would simply be reviewing old ground,” he said.

The leader of the opposition proposed areas of focus for the commission, including consideration of how widespread unethical behaviour is, financial institutions’ duty of care, and whether regulators are equipped to prevent illegal and unethical behaviour.

Shorten said the breadth and scope of the allegations showed problems in the industry “go beyond any one bank, type of financial institution or group of receivers”.

He accused the government of running a “protection racket” by refusing opposition demands for a royal commission.

“You can take Malcolm Turnbull out of the investment bank, but you can’t take the investment banker out of Malcolm Turnbull,” he said, referring to the prime minister’s former career in finance.

Shorten said Labor, the Greens, crossbench, and at least eight Liberal and National parliamentarians had supported a royal commission.

But the appetite for a royal commission is waning amongst some of those Coalition MPs, with Warren Entsch, previously a fierce advocate, now proposing a bank victim compensation tribunal instead.

On 16 August Katter blasted Entsch for the back-flip, accusing him of “dogging it” and pleading with him to back a royal commission.

Shorten said a royal commission “is the only forum with the coercive powers and broad jurisdiction necessary to properly perform this investigation”.

He invited Turnbull to meet with the victims of banking and financial scandals.

The Business of Death: 10 Killer Business Ideas

The Business of Death: 10 Killer Business Ideas

Whether you've lost a loved one, buried a family pet or had a near-death experience, death is simply a fact of life. And, as it turns out, the business of death can be quite lucrative.

From afterlife preparations to unique burial methods and memorials, it turns out that there are more businesses related to death than you might expect. Here are 10 businesses that are cashing in on the dearly departed.

Immortal ink

Just because you're no longer alive doesn't mean your tattoos can't live on. The National Association for the Preservation of Skin Art (NAPSA) hosts a website called Save My Ink, which is dedicaed to preserving tattoos of the deceased and leaving them in the care of their next of kin.

The tattoo preservation community isn't just for the recently deceased; the living are so interested in the process that NAPSA is retooling to offer their services directly through funeral homes. The move comes just in time, as Americans are getting record number of tattoos. Will the future homes of millennials be commonly decorated with the ink once worn by their loved ones?

Murder scene maids

You've heard the expression, "There's no use crying over spilled milk," but what's the consensus on spilled blood? If the idea of mopping up gore makes your eyes water (or worse), don't worry: There's a business you can call to tidy up even the bloodiest of messes.

Baxter Restoration, a cleaning and reconstruction company in Orlando, Florida, does something your average maid won't: It cleans up after the Grim Reaper. Whether it's a crime scene, the aftermath of a suicide or the remains of an exploded meth lab, Baxter will disinfect, decontaminate and leave things looking less macabre.

Industry insiders refer to such sluicing down of blood and brains as "biohazard" cleanup. And while this unusual service makes some people squirm, it's reassuring to know that there's someone you can call to perform this most unpleasant of chores.

An afterlife app

Leaving behind a hefty inheritance for family members to squabble over is a nice gesture. But what if you want to bequeath something more meaningful than money? There's an app for that.

Your Last Will is an iPhone app developed by former video game publisher and entrepreneur Wolfgang Gabler. The app lets users prepare for the afterlife by recording a short video with a final message for those they'll one day leave behind. Whatever your final words are, the app lets you record them in a 5-minute video, which is then uploaded to the company's servers.

Your Last Will then generates a QR code for you to share with a trusted confidant who can sign in to your account after your demise and distribute your video to friends, family, archenemies, old flings and whomever else you choose to haunt. You can even make your will public and inspire (or sadden) the entire Internet. 

Talking tombstones

A company that lets you send messages from beyond the grave is one thing, but a business that facilitates the sending of messages directly from your grave is quite another.

Invented and patented by Robert Barrows, president of an advertising and public relations firm in California, the "video-enhanced grave marker" is a tombstone for the modern age. Embedded with a remote-controlled video screen, this high-tech memorial caters to those unwilling to go quietly into the hereafter. 

As Barrows explains on his website, the invention allows people to record messages for family, friends and even complete strangers before dying. Once the person is 6 feet under, these messages are broadcast right in the cemetery. Mourners can just sit back, relax and enjoy the show!

Barrows envisions a future in which graveyard visitors will pay a fee (headset included) to wander from grave to grave, listening to the dark secrets and final advice of lost love ones, as well as dead strangers.

Compostable coffins

Sure, you eat organic apples and have sworn off plastic shopping bags, but will your green lifestyle die when you do? That's the question this next business wants you to consider before it's too late.

The Natural Burial Company is an online retail and consulting business that sells biodegradable coffins, caskets, urns and other funeral goodies for eco-conscious mortals. The business aims to facilitate the natural burial process for those who take the whole "dust to dust" thing literally.

To that end, the company sells goods like the "Everybody" Coffin Kit, a biodegradable cork coffin that you can put together in your living room. Talk about a fun do-it-yourself project! The company's online retail store also features a line of products for pets, including a biodegradable urn in the shape of a yarn ball for the eco-minded (but aging) feline in your life. 

Carbon-free cremation services

If you want to be cremated but aren't sold on the idea of being hoisted onto a conveyor belt and pushed into a giant oven, then this next business is for you. Anderson McQueen Funeral Home in St. Petersburg, Florida, specializes in a new kind of cremation that utilizes water, not fire, to dispose of human bodies.

The process is known as alkali hydrolysis, or "flameless cremation." And while it sounds less scary than its fiery cousin, the end result is much the same. In this process, the body is soaked in a tub of water and alkali for a few hours. According to the company, the process results in 75 percent fewer carbon emissions than traditional cremation, and is marketed to those looking for a greener way to go.

The process is still in the early adoption phase and is only legal in a few states. However, legislation is pending in many states that could bring this bizarre alternative into the mainstream.

Aquatic afterlife

Lots of people want their ashes scattered across the surface of the sea, but those looking for a unique postmortem experience may want to consider permanently joining the seafloor instead.

Decatur, Georgia-based Eternal Reefs specializes in the construction of "memorial reefs." The company mixes human remains into concrete, artificial reefs. The reefs are then lowered to the seafloor, where they play host to local sea life and help maintain marine diversity.

The company's "reef balls" are designed to withstand even the strongest of ocean currents, so mourners don't have to worry that a loved one's remains will drift into unchartered waters. Each reef also features a bronze plaque bearing the name of the deceased person it's made from, making this memorial much like an underwater tombstone.

Spacey send-off

If the deep blue sea isn't your thing, you might want to consider sending your remains into deep space instead. Celestis, a company offering "memorial spaceflight services," launches human remains into the dark corners of the universe.

Celestis' Voyager Service, scheduled to launch for the first time in 2015, isn't exactly the cheapest way to memorialize a loved one, but it might be the strangest. For $12,500, the company will strap 1 gram of the departed's remains onto a spacecraft and launch it into outer space. Or, if you'd like to know just where your loved one is headed, you can opt for the company's Luna Service, which rockets human remains directly to the surface of the moon.

For those with smaller budgets, Celestis' Earth Rise Service (starting at $1,295) launches human remains into outer space for just a few minutes. After floating in zero gravity, your loved one will drift back down to Earth, where you'll be reunited with their space-traveling remains.

Posthumous memory delivery service

Losing a loved one is difficult, no matter how you spin it. But Immortum, a virtual "memory box" service, tries to make the pain of death more bearable for those left behind.

By recording the memories of the elderly and those with terminal illnesses on audio and video, Immortum helps people remember their loved ones, even after they have died.

Immortum customers can specify when they want their "postlife chronicles" delivered to loved ones, be it immediately following their deaths, several months after or 50 years later.

The company also offers a free, Web-based version of its "postlife chronicles" service, as well as free e-tributes and digital obituaries.

Maker of wearable human remains

Why leave the remains of a loved one in an urn, gathering dust, when you can wear them around your neck instead? Purple Cloud Studio in Land O' Lakes, Florida, and Philadelphia-based Grateful Glass, both create custom keepsakes using the ashes of beloved family members and pets.

The artists behind these studios ask clients to send cremated remains, which they then seal in glass pendants, bowls and paperweights.

Britons positive about own finances but not economy, report finds

Almost 70% of consumers feel confident about their finances following the EU referendum but 62% feel country’s economy is ‘not good’, says Lloyds report

Consumers are feeling more positive about their personal financial situation but worried about the UK’s overall prospects, according to July’s Lloyds Bank spending power report.

The monthly barometer, which tracks both spending habits and consumer confidence, found that in the weeks following the vote to leave the EU, almost 70% of consumers said they believed their own personal finance situation was either “excellent”, “very good” or “somewhat good” – the highest level since the survey started five years ago.

The report, conducted in conjunction with Ipsos Mori, also found that spending on essentials such as food, drink, rent and utility bills rose for the first time since November 2014, albeit by only 0.1% on the previous year. Earlier this month the Office for National Statistics said retail sales rose 1.4% in July.

Lloyds asked 2,000 adult bank customers about their current and future spending habits. The findings will comfort those who feared the Brexit vote would send the UK economy into freefall, but caution others – not least because it revealed that in July, pessimism increased markedly about the prospects for the overall UK economy.

Nearly two thirds (62%) of respondents said they believed the country’s financial situation was “not good” or “not good at all”. This compares with 55% who felt similarly negative about the wider economic outlook when asked a month earlier.

People said they are also feeling less positive about the overall employment situation, with 50% of respondents now feeling “not very good” or “not good at all”, compared to 46% in June.

The findings chime with recent forecasts of a slowdown in economic activity in the second half of 2016, which prompted the Bank of England to lower interest rates to 0.25% earlier this month.

Yet despite this, three quarters of respondents remained positive about their own job security, down just 1% from June.

Robin Bulloch, managing director, Lloyds Bank said: “What’s interesting is that people are more negative about the general economic outlook since the UK voted to leave the EU but feel more positive about their own personal circumstances. For now at least consumers seem intent on putting any fears of a wider economic slowdown to one side and carry on spending,”

Banking royal commission focus areas proposed by Bill Shorten

Opposition leader continues his push for a banking inquiry by inviting Malcolm Turnbull to meet victims of ‘bank ripoffs’

Bill Shorten has written to Malcolm Turnbull outlining what he thinks should be the focus of a banking royal commission.

On the final day before the parliament sits for the first time, the opposition leader has also invited the prime minister to meet some victims of “bank ripoffs” this week in Canberra, saying it would be good for him to explain to them personally why a royal commission would “delay justice for those who urgently need it”.

After months of criticism that Labor’s calls for a royal commission were too vague and general, Shorten has suggested a succinct set of focus areas.

In a letter to Turnbull on Sunday night Shorten said a royal commission into the banking and financial services industry should examine issues such as:

1. How widespread instances of illegal and unethical behaviour are within Australia’s financial services industry

2. How Australia’s financial services institutions treat their duty of care to their customers

3. How the culture, ethical standards and business structures of Australian financial services institutions affect the behaviour of these institutions

4. Whether Australia’s regulators are really equipped to identify and prevent illegal and unethical behaviour

5. Comparable international experience with similar financial services industry misconduct and best practice responses to those incidents

6. And other events as may come to light in the course of investigating the above.

Turnbull last week said Labor’s idea for a royal commission would be too costly, would run for too many years, and would not help anyone.

He wrote to Shorten saying royal commissions are most effective “when there is a particular event or specific problem which needs to be investigated”.

“A royal commission as you know is no more than an inquiry with the power to summon witnesses and compel the production of evidence,” Turnbull said. “It cannot lay a charge, it cannot change a law. All it can do is inquire and report.

“A royal commission, established with the very wide terms of reference … would run for many years, cost hundreds of millions of dollars and at its conclusion present a report. It would not compensate anybody, it would not prosecute a wrongdoer, it would not change a law or regulation.

“It would delay action and postpone reform. It would delay justice for those who urgently need it.”

He also suggested Shorten should appoint some of Labor’s keenest minds to the House of Representatives economics committee that will eventually compel chief executives of the major banks’ to answer questions about interest rates and bank behaviour.

Turnbull created the new rules for the committee after outrage over the banks’ recent decision not to pass on Reserve Bank’s recent rate cut in full.

The treasurer, Scott Morrison, said the government was frustrated by the banks’ failure to pass on the interest rate cut and needed to do practical things to increase transparency.

In his letter to Turnbull, Shorten criticised the prime minister’s response to the scandals plaguing the banking industry.

“We need to restore trust in our banking and financial system,” Shorten said in his letter. “Your piecemeal approach is doing the exact opposite.”

EU staff petition attacks former EC president over Goldman Sachs job

More than 75,000 people sign petition denouncing José Manuel Barroso and calling for him to lose his EU pension

More than 75,000 people have signed an EU staff petition calling on former European commission president José Manuel Barroso to forfeit his pension for bringing the European Union into disrepute by joining Goldman Sachs.

The petition, organised by a small group of EU officials, accuses Barroso of “irresponsible” and “morally reprehensible behaviour” for joining the American investment bank. Although Barroso is not the first former ex-commissioner to join Goldman, his appointment has sparked anger among rank-and-file staff, who have highlighted the bank’s role in mis-selling sub-prime mortgages, as well as lending money to the Greek government before the country’s debt disaster exploded.

In a scathing denunciation of their former boss, the officials describe the Goldman job as “a disastrous symbol” for the EU and “a gift horse for europhobes”. “It is a further example of the irresponsible revolving-door practices, which are highly damaging to the EU institutions and, even if not illegal, morally reprehensible.”

Organisers plan to present the petition to the current leaders of the EU institutions at the end of September.

Separately a staff union, which claims 2,000 members, has written to the current European commission president, Jean-Claude Juncker, to criticise the appointment, which they say “can only provide further ammunition for populist and extremist europhobe propaganda”.

Georges Vlandas, president of the Union for Unity, told the Guardian that when the political future of the EU was in question, senior officials had a responsibility to set an example on ethical behaviour.

An organiser of the separate staff petition echoed this view. “We are going through a different and dangerous period in the European project and the level of concern among EU officials is quite high. Part of it is about their job, but part of it is about the [future of the] whole project,” said the official, who asked to remain anonymous.

Barroso, a Maoist as a student, who went on to become a centre-right prime minister of Portugal, started at Goldman Sachs in July to advise the bank’s clients on the Brexit fallout.

He left the commission in November 2014, after a tumultuous decade in charge, when the EU faced the storms of the eurozone debt crisis and a rising tide of euroscepticism.

Ex-European commissioners must inform the EU executive of any new position for up to 18 months after they step down. Barroso took up the post at Goldman Sachs 20 months after leaving the commission.

Organisers say it is impossible to tell how many of the signatories work for the EU institutions, as anyone can sign the Change.org petition. But it has clearly attracted many more people than the 46,000 EU civil servants who work in Brussels, Luxembourg and national capitals.

A small group of EU officials launched the petition, because they were disappointed with the muted response from the current EU hierarchy, a second organiser told the Guardian. “We had this gut feeling that what Barroso did was wrong and that it was the job of President Juncker to condemn him forcefully,” he said. “But there was a clear attempt to make this a non-issue.”

When Barroso’s appointment became known, a commission spokesperson said the former president had not broken any rules.

Juncker later told the Belgian newspaper Le Soir that he would not join Goldman Sachs, but declined to condemn his predecessor more forcefully, noting that it was an individual choice.

But the Goldman job caused outrage in France, where the Socialist government is under pressure from the far-right leader Marine Le Pen. She described Barroso’s move as “not surprising”, because “the EU serves big finance, not the people”.

France’s Europe minister, Harlem Désir, has said the “scandalous” move showed the EU’s conflict of interest rules needed to be tightened.

The EU staff believe Barroso is in breach of the EU treaties, which state that an ex-commissioner must act with “integrity and discretion” when it comes to taking positions after they leave office. Unlike the commission’s code of conduct for top officials, there is no time limit on the treaty obligation.

They want the commission or EU member states to refer the case to the European court of justice, which has the power to remove EU pensions.

A commission spokeswoman declined to comment on the petition until it was formally lodged at Brussels HQ. She said: “When it comes to avoiding potential conflicts of interest of former members of the college [of commissioners], the commission has strict rules in place – especially compared with many member states and other international organisations.”

A Goldman Sachs spokesman said Barroso would not be making any comment. “We follow strict rules set by our global regulators in the hiring of ex-governmental officials. José Manuel took the role after an 18-month restriction period following the end of his term at the European commission, a longer period than that imposed by most European institutions.”

He added: “José Manuel’s experience and advice in this time of uncertainty will be extremely valuable to our clients and their reaction to his appointment at Goldman Sachs has been very encouraging.”

The bank also defended its Greek currency swaps “as entirely legitimate debt management transactions” that were in line with EU rules.

Sallie Krawcheck on her Wall Street ascent – and how to 'attack the boys' club'

The former head of Sanford C Bernstein and Smith Barney is behind an investment platform, Ellevest, designed around women’s financial priorities

Sallie Krawcheck’s first “eureka” moment came just before her 30th birthday.

She had walked away from her investment banking job, after realizing she had been relegated to working with the firm’s most lackluster senior dealmaker. She was at home with her two children when it hit.

“I should be an equity research analyst!”

It turned out to be the beginning of one of Wall Street’s storied careers, for one of the tiny handful of women to make it big. Accepting the only job offer she got, from Sanford C Bernstein, in 1995, Krawcheck was its chief executive by 2001. By 2002, Sandy Weill, chief executive of Citigroup, had lured her away to take over as head of Smith Barney.

In 2005, she was chief financial officer of Citigroup and tipped to become Wall Street’s first female CEO. Even her high-profile firing following the financial crisis didn’t derail her career: Krawcheck surfaced as the head of the newly merged Bank of America Merrill Lynch’s wealth management division, charged with overseeing the famed “thundering herd”.

Then Bank of America CEO Brian Moynihan, possibly threatened by her high profile, offered her a choice between departure or demotion. She chose to leave. The aftermath of that high-stakes Wall Street power struggle lead to her next great eureka moment.

“There are different ways to attack the boys’ club than from the inside,” she tells the Guardian.

Sally Krawcheck became head of Smith Barney after quickly rising to CEO of Sanford C Bernstein. Photograph: AP

For years after her 2011 “resignation” from Bank of America, Krawcheck debated with herself. She knew being a woman had given her a fundamentally different perspective on the way that Merrill Lynch’s “herd” of largely male brokers and financial advisers did business, a view that had been shaped and refined by her years at Citigroup. “But I made all the arguments to myself,” she says. “There were plenty of firms out there already” that could opt to do business in a different way, to serve their clients – especially women – better. Except that they didn’t.

“I watched and watched,” Krawcheck says. The percentage of financial advisors at big Wall Street firms that were men remained unchanged, about 85%. And that matters, she says, because they didn’t pay much attention to the women among their clientele, even when they thought they did.

“We’d study this, when a male advisor met with a couple, and ask him how much time he thought he spent interacting with each member of them, and he’d say, ‘Oh, 55/45.’”

In fact, the evidence showed he had spent 90% of his time talking to the man, and not realized it. Unsurprisingly, Krawcheck found that when they were widowed, 70% of Merrill’s clients took their assets and left.

BMO Wealth Institute calculates that women control about 51% of all personal wealth in the US, or some $14tn, and projects that figure to hit $22tn by 2020. Investment firms cannot afford to disregard women or to lose them as clients. And yet they weren’t hiring women as advisers.

“One firm used a marine corps questionnaire for hiring,” Krawcheck recalls.

Since it wasn’t her job to force Wall Street into recognizing what it was doing wrong, she decided to try to start doing it the right way. The first step was the purchase in spring 2013 of 85 Broads, a financial membership and networking community established by alumnae of Goldman Sachs, which she promptly renamed Ellevate, to reflect its new mission: to provide more women with a way to become involved and engaged in their finances.

Earlier this year, she rolled out the next stage of her plan: an investment platform designed around women’s needs and priorities, not those of the men who run Wall Street and the firms where she cut her teeth.

“The whole icon of a bull that stands for Wall Street – you couldn’t come up with an image of a more male environment,” she says. “Women feel that the brand doesn’t speak to them.”

They also, she argues, speak a very different language when it comes to money, and have very different objectives, which men don’t grasp at all.

To the extent that the big Wall Street firms attempt to cater to women, they “pinkify” their offerings, Krawcheck says. Why, she asks, does a woman-friendly approach to investing “have to mean the junior version?

“Somehow there is this feeling that women require remedial financial education and so everything must be dumbed down. The reality is that we all need a lot more education, but guys just go ahead and invest anyway.”

‘Just friggin’ pay them more’

Krawcheck’s irritation and anger at this kind of systemic bias – and its impact on women, who end up so alienated by the Wall Street system and so daunted by the difficult of finding a firm or an independent adviser who will listen to them that they simply avoid seeking out the investment advice they need – creep through her trademark charm and humour.

When others suggest that it doesn’t make sense to focus on the investment gender gap because it’s more important to close the gender pay gap first, you can almost hear her grit her teeth before answering.

“That’s like saying you broke your arm and you broke your leg, but I’m not going to fix your broken arm because I can’t fix your broken leg yet!”

As far as the gender pay gap itself is concerned, she has no patience at all. “Just friggin’ pay them more” is Krawcheck’s message to companies that still compensate men and women inequitably. “Oh, and if you haven’t stopped to check whether you have a gender pay gap? You do.”

And now Krawcheck has created a place where those women, tired of testosterone-fueled investment jabber about relative price/earning ratios and the best mid-cap growth mutual fund to pick, can find an investment home.

Krawcheck’s Ellevest does not “pinkify” investing, she insists, but it does start the process in a very different way. Ellevest’s objective isn’t to design a portfolio that will beat the market or focus on the exciting investment concept of the day. Instead, the robo-adviser designs portfolios based on the user’s investment time horizon and risk tolerance.

“Women think in terms of goals-based investing,” she explains.

It’s slightly pricier than rivals (the fee is 0.5% of assets a year), but cheaper than working with a traditional financial adviser would be. Moreover, as Krawcheck points out, it’s a process designed to ensure that women actually feel that their portfolios and goals are in sync.

“Women value capital preservation many times more than men, but you won’t find that reflected” at Merrill Lynch or anywhere else in the industry, she argues.

It’s early days still. If the company thrives, however, there’s no downside: success will give women an alternative to the Merrill Lynches of the world and give the latter a much-overdue wakeup call, the kind that its leaders couldn’t or wouldn’t listen to from inside the walls.

Welcome to Wall Street’s girls’ club.

Conflating public and private lives makes fools of us all

Conflating public and private lives makes fools of us all

As financiers from RBS’s Fred Goodwin to Northern Rock’s Adam Applegarth and the IMF’s Dominique Strauss-Kahn have demonstrated, senior bankers are quite as likely as, say, Boris Johnson and members of the SNP to embark on extramarital relationships, sometimes discovered before they move on, sometimes not. Though given the superhuman abilities reflected in the bankers’ salaries, it should be emphasised that they are obviously many thousands of times better at conducting affairs than the average married person and would take their talents abroad if anyone questioned their rewards in this respect, with grievous consequences for the British economy.

António Horta-Osório, the CEO of Lloyds Banking Group, is entitled to ask why his recent sightseeing in Singapore, accompanied by the chief executive of the Russell Group, Wendy Piatt, was of such interest to Sun readers, that the paper revealed it, beneath the front-page headline: Lloyds Bonk. That the bank is still 9% state-owned cannot amount to the public’s right to CEO uxoriousness or not, anyway, at the same time that the once-dedicated shagger Boris Johnson is promoted to prime minister’s understudy.

If anything, modern Westminster shows that, while not exactly compulsory, a furious extra-marital sex life is a tremendous way for a male public servant to create interest and progress his career. On the left, John, now Lord Prescott, rose from shifty practitioner of the office knee-trembler to become one of the greatest moralists of the age, certainly a rival for John Major. It remains only for women MPs to be rewarded, or pardoned, for the same enthusiasm, before the parliamentary sex scandal is redefined as the obvious stepping stone between backbencher and junior minister. Though, as David Mellor’s career reminds us, why stop there?

As for any link between continence and competence, Horta-Osório’s record, like Johnson’s, speaks for itself. Give or take a further 3,000 job losses, a fall in profits and a record fine for mishandled PPI claims, Lloyds bank is now in such excellent shape that Horta-Osório’s latest pay deal, including a 6% salary rise, was £8.5m. Having established that Horta-Osório had not claimed any Piatt-related costs of his trip on expenses, Lloyds told the Sun: “In this regard, the review found there were no breaches of the group’s policy and there was no case to answer.” It continued: “Lloyds has been returned to financial health over the last five years under the leadership of António, and is well-placed to continue supporting the UK economy and to help Britain prosper.”

But in another regard, it might have added, António had a little explaining to do. Shortly after his arrival at Lloyds, Horta-Osório introduced a code of personal responsibility, one intrusive enough to satisfy the Sun, and designed to help Lloyds staff to “strive to always do the right thing”. Incentives were included: “We take any non-compliance with the codes very seriously.” I recommend the code’s crystalline “decision guide” to any employee who is contemplating something that might not merely make them look exceptionally silly, but cost them their job.

For instance, a married employee might ask himself/herself: “I would like to meet my girlfriend/boyfriend while on company business in Singapore, then take boat trips together, even though discovery would cause personal and professional agonies and raise unfair questions about my judgment and expenses. What should I do?”

In this instance, the decision guide would lead the troubled employee straight to three questions: “Am I leading by example?”; “Would Lloyds Banking Group be comfortable if my actions were reported externally?” and; “Would I be happy to tell my colleagues, friends and family about my actions?” If, like our fictitious employee, you answered no/not sure to one or more, then the code is clear: “Contact your line manager or a responsible senior leader in your business area for further advice and guidance.”

The glaring omission here is how to proceed if you are already CEO of Lloyds and therefore have no line manager or responsible senior leader with whom to discuss your Singapore trip. In earlier times, Mr Horta-Osório praised his wife’s advice – she recommended he take the Lloyds job – but in this case, that, presumably, was contra-indicated. Perhaps the careless code-writers thought it inconceivable that any leader brilliant enough to help Britain prosper wouldn’t also be enough of a genius not to breach his own regulations by taking an ostensibly adulterous mini-break on the Singaporean harbour front. Such a gigantic talent would be sure to remain, judiciously, indoors. One recalls that even Prescott was exposed only after his diary secretary’s boyfriend went to the Daily Mirror.

It becomes clearer why, in what first resembled some grim, public-appeasing precedent, Mr Horta-Osório felt compelled to issue a staff memo much praised by PRs and trumpeted by the Sun as a “grovelling apology”.

On examination, there is little sign of accountability in Mr Horta-Osório’s effort, which adheres strictly to the “mistakes were made” method of apology, so dear to politicians and bankers, that regrets, preferably in the first person plural, whatever unfortunate circumstances have mysteriously arisen. More than anything it recalls those forced HBOS apologies: “We are profoundly and I think unreservedly sorry at the turn of events.”

In the current case, Mr Horta-Osório says: “I deeply regret being the cause of so much adverse publicity” (ie, being found out); he dwells on the company’s “major accomplishments”; he delicately alludes, as he must, to the code he has transgressed – “the highest professional standards”. From which it is but a short step to shared responsibility. “We must recognise that mistakes will be made. I don’t expect anyone to get everything all the time.”

Quite. It would be ridiculous to think that, in the lower regions of the Lloyds banking group, nobody on a fraction of his £8.5m would impulsively do something, as prohibited by the Antonine Code, that they would be unhappy to tell their colleagues, friends or family about.

Perhaps it is not so unreasonable, however, for Mr Horta-Osório’s co-workers, and even for the public, with its 9% holding, to wonder if someone in such hilarious contravention of his code can be worth the full £8.5m. Can António, the star in his own revival of Measure for Measure, be the right person to lead by example?

Either, as Mr Horta-Osório says, his “personal life is obviously a private matter”, and elements of his code are an outrageous imposition, in which case he’s in the wrong, or his code is defensible and he is in the wrong for non-compliance. “I strongly believe you should link compensation with performance,” he has said. A merciful public might conclude that, if Mr Horta-Osório is not to join the blameless 3,000 staff now earmarked for disposal, he should continue in employment only on a salary that better demonstrates this link, £15,156 per year being both generous to him, and the same as a Lloyds customer service assistant.

6 Smart Business Ideas for Retirees

6 Smart Business Ideas for Retirees

Looking for a new challenge now that you've retired from the corporate world? Why not start your own business?

Many retirees who've been employees all of their lives get excited at the thought of running the show, and building a business that reflects their interests and values. If you're thinking of launching a business during your retirement, here are six ideas to get you started.

Online businesses 

Many new business ideas well-suited for retirees harness the power of the internet, as long as you don't let technology intimidate you.

"Online businesses are truly some of the best types of businesses for people over 50, but they need to get over their fears," said Diane Eschenbach, owner of startup consultancy firm DE Consultants and author of "How to Quickly Start a Business Online."

One simple new business option involves researching and compiling information on websites.

"One of my favorite types of online businesses for the 'post-50 group' is curation sites," said Eschenbach. 

As people get older, the time invested in activities (such as a new business venture) becomes very important, said Eschenbach. She is a big fan of the idea of retirees learning to use technology because of the time saved by automated programs, but she stresses the importance of choosing a business you enjoy.

"The key to a great retirement is doing what you love and finding a way to monetize it quickly," said Eschenbach. [See Related Story: New Business Idea? How to Test Before Launching ]

Consulting and coaching

Retirees considering starting businesses should start by thinking about two areas: skills from their previous jobs and life lessons. These experiences make retirees well-positioned to share their knowledge.

"Since they have a lot of life and career experience, a consulting and coaching business suits them well as a new endeavor," said Dolly Garlo, business coach and president of Thrive!! Inc. By capitalizing on existing knowledge, retirees can spend their time learning the ropes of running a new business.

"Retirees should focus on jobs and business opportunities that leverage the individual's years of work and life experience, such as consulting, teaching or tutoring," said Jamie Hopkins, Esq., assistant professor of taxation in the Retirement Income Program at The American College in Bryn Mawr, Pennsylvania, and associate director of the New York Life Center for Retirement Income. 

Instead of sharing knowledge through a face-to-face business, retirees may prefer to teach or coach through a freelance writing business. "Writing and blogging can be a way for the retiree to stay engaged in an online or other community, generate some income and leverage their knowledge," said Hopkins.

As you brainstorm new business ideas, Garlo suggests asking a few key questions. "How much time do you want to spend working? What kind of flexibility do you require? Do you want to work from a fixed location or be able to work virtually? What subject matter in particular excites you?"

Garlo says it's also important to consider your potential business customers, and if they can afford to pay you. "This will determine whether what you provide becomes a hobby or charitable endeavor, or is an actual business," she said. 

Start a "mastermind group"

Have you left a successful career after establishing a large network of valuable and experienced business contacts? If so, the main ingredients of your new business idea may be as close as your address book.

"[Retirees] have learned lessons that many business owners won't learn for another 10 to 20 years," said Tobe Brockner, author of "Mastermind Group Blueprint: How to Start, Run and Profit from Mastermind Groups" (Aloha Group Publishing, 2013). "This is why starting a mastermind group is a natural fit for retirees."

Members of mastermind groups meet regularly to collaborate and solve the problems or issues of their members, tapping into the collected experience, skills and knowledge of the group.

"Many [retirees] already have a network that they can tap into to find excellent mastermind group members, and by being the group organizer and facilitator, they can make a nice supplemental income," said Brockner. 

Depending on the size of the area in which they live, Brockner said enterprising retirees can start and facilitate multiple mastermind groups, and charge a premium for the value of being a member. 

"Mastermind group facilitators can generate between $1,500 to $3,000 per month per group for just a few hours [of] work," he said.

Service-based businesses

Providing services has long been a popular idea for younger, active retirees who want to start their own businesses; however, familiar choices like handyman services, tutoring or pet sitting aren't the only games in town.

"There are many options for service-based businesses, but one area particularly well-suited for retirees is to provide eldercare services," said Nancy Collamer, career coach and author of "Second-Act Careers: 50+ Ways to Profit from Your Passions During Semi-Retirement" (Ten Speed Press, 2013).

"Many elderly living on their own need someone to help out with the tasks of daily living: housekeeping, shopping, errands and cooking," said Collamer. "They also hire people to help out with special projects such as relocating, medical claims assistance and bill paying." 

Entrepreneurial support services

As the total number of entrepreneurs increases, so does the number of entrepreneurs over the age of 50. Why not start a business catering to them? There is a tremendous opportunity for you to assist new entrepreneurs with building, managing and marketing their businesses, said Collamer. While older entrepreneurs have solid core skills from previous professions, they often fall short on the skills needed to capitalize on their expertise and turn their knowledge and talents into a profitable business.

"So think about how you can apply your skills in a small business environment," suggested Collamer. "Are you a talented graphic designer? You might be able to design logos, brochures or menus for a new restaurant in town. Do you have strong financial skills? Perhaps you could work as a small business coach or a bookkeeper."

Few business people have the time and know-how needed to handle all the tasks required to keep a business profitable, Collamer said. And filling this need suits aspiring business owners who are also retirees.

"Most small business people can't afford full-time staff, so this can be a nice way to earn income on a flexible or part-time basis."

Active living

There are many ways to take advantage of the spreading "active living" philosophy, which is especially popular among Boomers. Who better to help show them the way than a peer with the know-how to stay fit and age gracefully? One of the greatest things about starting a business focused on active living is how creative you can be about what exactly your business looks like.

"The spectrum of involvement is pretty wide," Jonah Bliss, director of community for electric bicycle company EVELO, said. "[It could be] anything from opening up franchises for electric bike stores to being ambassadors for healthy living brands, or running tours and treks to outdoor locations."

These types of businesses not only work well as a way to bring in some money after you retire from your career, but they also help others maintain their health as they age. Be creative and use what you know to find your niche in the growing active living marketplace.

Scott Morrison says banking industry needs a culture shift, not an inquiry

Treasurer says Coalition has strengthened Australian Securities and Investments Commission and Labor’s call for royal commission is ‘cynical politics’

Scott Morrison has said a culture shift in banking is required and suggests bankers should serve their clients the way good doctors care for their patients.

As the government comes under sustained pressure for an inquiry into bank scandals involving allegations over financial planners, rate rigging and life insurance, the treasurer said the Coalition had already acted to address problems.

The government had strengthened the powers and resources of the Australian Securities and Investments Commission (Asic) to deal with “direct failures and malfeasance” within the banking system – as recommended by David Murray’s financial systems inquiry.

“I agree with those in the banking sector who have said they believe the key to making this cultural shift is to restore banking as a profession,” Morrison said.

“A professional banker should serve their clients like a doctor cares for their patients. Now the medical profession is not perfect either. But I agree that such an approach is a good place to start.”

He said calls for a royal commission from Labor (as well as Nationals senator John Williams, LNP MP George Christensen, the Greens, the Nick Xenophon Team and Pauline Hanson’s One Nation) had been raised with then assistant treasurer, Kelly O’Dwyer, at a meeting of the International Monetary Fund.

“The then assistant treasurer, Kelly O’Dwyer, was in Washington for IMF meetings, where she was approached and asked what is wrong with Australia’s banking system,” Morrison said.

“Labor’s careless approach and cynical politics on this issue is a genuine risk to broader confidence in our banking and financial system which can only weaken the system.”

Rather than engage in “cynical politics” the government was working to strengthen the banking system for borrowers, depositors and shareholders in a practical way.

He named recommendations from the financial systems inquiry which saw banks raise their capital ratios, the implementation of unfair contract laws in November and moves to strengthen the crisis management powers of the Australian Prudential Regulation Authority (Apra) as examples of government reforms.

The pressure continues to build for a royal commission into the banks. The senior parliamentary adviser, the clerk of the Senate, Rosemary Laing, advised Greens senator Peter Whish-Wilson that a commission of inquiry was possible if the government refused to establish a royal commission.

Labor is cautious about any form of inquiry apart from a royal commission, because of the powers and funding afforded to a royal commission. As Laing’s advice stated, a parliamentary commission of inquiry would depend on the Coalition to fund it. Its powers could be contested in a court.

The constitutional lawyer George Williams said a commission of inquiry was unlikely to pass the parliament without government support.

“It’s very hard to see it would pass both houses, or be funded by the government,” Williams said.

“These issues as set out in the clerk’s advice make it clear why this is unlikely to be viable. Any such inquiry needs government support.”

The Labor leader, Bill Shorten, said although he understood the Greens were trying to get a compromise from Turnbull, Labor would persist with its calls for a royal commission because under pressure the prime minister would “give in”.

“What Australians want is not a system that goes after banks once they have ripped people off,” he said. “What Australians want is to stop the rip-off in the first place.

“Labor will persist with its calls for a banking royal commission and we think that is the right way to go. We are not going to give up merely because Mr Turnbull doesn’t want to do it.

“My experience of Malcolm Turnbull is that if you put enough pressure, this guy gives in.”

Parliament could force banking inquiry despite hostile Coalition, says Senate clerk

Exclusive: Key adviser says rare and powerful ‘commission of inquiry’ could be launched without government approval if both houses vote in favour

The opposition and minor parties could force a rare and powerful “commission of inquiry” into the banks if the Coalition refuses a royal commission, according to the clerk of the Senate, Rosemary Laing.

And the Senate’s key parliamentary adviser said if the commission of inquiry bill won a majority in both houses it would be an outcome that “any government would find difficult to resist”.

Laing has advised the Greens senator Peter Whish-Wilson that parliament could establish the inquiry, similar to that set up to investigate former Labor minister and high court justice Lionel Murphy by the Hawke government.

Whish-Wilson immediately warned Malcolm Turnbull that he would pursue the commission of inquiry if the prime minister failed to establish a royal commission. He has written to the opposition leader, Bill Shorten, to offer to work with Labor if its motion passes but the government refuses to support a royal commission.

“If the Turnbull government refuses to act on establishing a royal commission into the misconduct in the financial services sector then I want parliamentarians to know there is another powerful option for us to pursue,” Whish-Wilson said.

“If the executive won’t act on an issue important to the Australian people then the parliament must consider all its options.”

The difference between a royal commission and a commission of inquiry is the latter reports to the parliamentary houses rather than the government of the day.

The Murphy case in 1986 is the only time a parliamentary commission of inquiry has been used and at that time, three judges were appointed to oversee the inquiry to provide independence. They were to investigate the behaviour of Murphy, who was convicted of attempting to pervert the course of justice, a finding later overturned on appeal. But the commission of inquiry was not completed because Murphy was diagnosed with a terminal illness and he died later in the same year.

In a finely balanced parliament, where the government has a one-seat majority in the House of Representatives and a nine-seat deficit in the Senate, the option could force the issue on the government, which has so far resisted a banking royal commission.

Whish-Wilson, a former merchant banker who has long campaigned on bank behaviour, sought the advice from Laing on the little used parliamentary power.

Laing’s advice, which has been seen by Guardian Australia, suggests a commission of inquiry into the banks would be possible although there would be difficulties, such as funding the inquiry or forcing the government to allow debate in the lower house.

“It would be open to the parliament to establish a commission of inquiry, to give it appropriate powers and immunities and to require it to report to the houses rather than the executive government, provided the inquiry was within the powers of the commonwealth as reflected in the constitution,” Laing writes.

“Any such commission would have the powers that the parliament saw fit to give it. They might replicate those of a royal commission or a parliamentary committee or be specifically designed for a particular purpose.”

Laing notes there could be “numerous” barriers to the inquiry, which needs a majority in both houses.

While the inquiry debate could be held in the Senate, the Coalition would not schedule time for debate in the House where it has much more control over procedure.

Laing notes while several (Coalition) MPs have spoken about crossing the floor on banks, they may be “reluctant to vote against their party on a procedural question”.

Laing notes that even if the commission bill passed, it could be challenged for validity and “costly interference could be run by interests opposed to such an inquiry”.

“Recourse could be had to litigation at every step to frustrate the commission if the opponents were determined and deep-pocketed enough, including challenges by individual witnesses, not to mention challenges to the appointment of commissioners in the first place,” Laing writes.

She said finding appropriate commissioners to run the inquiry would be “problematic”, given most people with the expertise (such as former bankers) would be vulnerable to conflict of interest claims.

She suggests funding the commission would be an issue because in the Murphy case, the inquiry was proposed by the executive government, so funding was not a problem.

The Senate and lower house non-government MPs cannot initiate funding. But she notes on funding “it would be politically difficult for any government to resist the views of both houses expressed in the legislative form”.

“If such a statute were passed, even without the support of the government, it would be a clear indication that the two houses of the parliament, as constituted by elected representatives, were in support of the inquiry,” Laing writes.

“Any government would find it difficult to resist the views of both houses in this form.”

In the Senate, Labor, the Greens and three senators from the Nick Xenophon Team (NXT) senators, plus Pauline Hanson’s four senators and Jacqui Lambie all support a royal commission – well over the 39 senators needed to pass a bill.

In the lower house, if all the independents and minor party MPs supported a motion, it would require one Coalition MP to cross the floor. Of the 150 seats, the Coalition has 76 seats or 75 once the speaker Tony Smith is removed from the equation.

Labor, Greens MP Adam Bandt, NXT MP Rebekha Sharkie and Katter Australian Party’s Bob Katter all have supported a bank royal commission in the past. Indi independent Cathy McGowan has said she is open to a royal commission, depending on the terms of reference.

Before the election Labor joined calls by Whish-Wilson, Nationals senator John Williams and Nick Xenophon for a royal commission into the financial services industry. Queensland LNP MPs George Christensen and Warren Entsch have both supported the idea in the past.

While Turnbull has promised to force large bank chiefs to appear before a house committee annually, he has resisted calls for a royal commission, though he remains open to a bank tribunal.

Whish-Wilson said while the Greens would support Labor motions for a royal commission (given the Greens had proposed similar motions in the past), the option of a commission of inquiry was a live option.

“Australians overwhelmingly support a royal commission into the financial services sector and are tired of the excuses and inaction from the Turnbull government,” Whish Wilson said.

“The Greens have led the call for a royal commission into financial scandals such as the $4bn collapse of Australia’s forestry managed investment schemes, and we propose this option for all parliamentarians to consider.”

Lloyds chief apologises for damage caused by affair allegations

António Horta-Osório emailed 75,000 staff to express regret for bad publicity and attempts to quash questions about his position

The chief executive of Lloyds Banking Group has written to employees to apologise for revelations about his private life and the damage they caused the group’s reputation.

In an email sent to the bank’s 75,000 staff, António Horta-Osório said he regretted the bad publicity caused by allegations of an affair with Wendy Piatt, a former aide to Tony Blair. The couple were pictured together while the married bank chief was on a business trip to Singapore.

Horta-Osório, whose pay deals over the past two years total £20m, also sought to quash talk of him leaving the group, saying he was as committed as ever to leading Britain’s biggest retail bank.

The reports earlier this month prompted questions about whether Horta-Osório breached Lloyds’ policies by combining private and business expenses. Lloyds said on 10 August he had no case to answer after an internal review.

In his email to staff, Horta-Osório reiterated that he kept personal and business expenses separate. But he admitted that the furore had damaged the bank, which is 9% owned by taxpayers after being bailed out during the financial crisis.

He wrote: “My personal life is obviously a private matter as it is for anyone else. But I deeply regret being the cause of so much adverse publicity and the damage that has been done to the group’s reputation. It has detracted from the great work which you do for our customers on a daily basis and from the major accomplishments of the past five years.”

Horta-Osório has stressed the importance of maintaining high standards of behaviour to Lloyds staff, which has paid multiple fines and billions of pounds in customer compensation for past misdeeds. He said he included himself in his call for good behaviour and promised to do better.

He added: “Having the highest professional standards raises the bar against which we are judged and as I have always said we must recognise that mistakes will be made. I don’t expect anyone to get everything right all the time. The important point being how we learn from those mistakes and the decisions and actions we take afterward.”

The revelations about Horta-Osório’s private life came soon after Lloyds announced plans to cut a further 3,000 jobs. This is on top of the 54,000 job losses announced since the bank rescued HBOS during the financial crisis. The Portuguese banker, who joined in 2011 from Santander, got a 6% salary increase to £1.12m this year, while staff received 2%.

Horta-Osório told staff their hard work was behind the bank’s recovery and its ability to cope with low interest rates and a weakening economy.

“With that in mind please be assured that I am as committed as ever to leading the group forward to deliver our strategy and to meet our future ambitions. Thank you again for your messages of support over the last few weeks. I have greatly appreciated them,” he wrote.

RBS starts charging financial customers to park their cash

Chairman questions low interest rates after up to 70 major clients such as banks and pension funds are charged to hold cash kept as collateral for trades

As Royal Bank of Scotland started charging some clients to hold their cash, its chairman has questioned the effectiveness of ultra-low interest rates and called for a rethink of monetary policy .

From Monday, RBS will charge interest to about 70 customers, such as banks and pension funds, on the cash they place with the state-controlled bank as collateral for trading complex financial products.

It is the first time a bank has imposed charges for sterling holdings since the BoE halved interest rates to a new record low of 0.25% on 4 August and restarted its quantitative easing (QE) programme of government bond purchases. The BoE relaxed monetary policy in an effort to support the economy following the vote to leave the EU by discouraging banks from hoarding cash.

RBS’s chairman, Sir Howard Davies, said that as interest rates get closer to zero the central bank loses control of the effects of monetary policy and leaves itself few options for action iin a recession.

Davies told Bloomberg TV: “When you reach the lower band you don’t know how the economy will respond … We don’t really know what impact QE on the scale it is being implemented is having. I really do think we are entering a period where some of the previous certainties are no longer quite so certain and you really need to rethink the monetary policy framework.”

Davies said he agreed with John Williams, president of the Federal Reserve Bank of San Francisco, who said last week central banks should consider adopting a higher inflation target more suited to lower growth.

“I’m in favour of trying to lift over time the level of inflation we target,” Davies said. The BoE aims to keep inflation rising at a rate of 2%, a target it is likely to exceed as the falling pound pushes up prices even as the economy slows.

Global interest rates are very low and are negative in the eurozone and other jurisdictions as central banks seek to discourage companies and banks from hoarding cash by charging banks to park money with the central bank. The BoE’s governor, Mark Carney, has said he is not a fan of negative interest rates and most economists expect the BoE to cut rates no lower than 0.1%.

RBS, which is 73% owned by the taxpayer, has limited its negative interest rates to deposits required of financial companies to carry out futures trades. RBS said only one of the clients in question was a non-financial company.

Small firms and other larger companies are unaffected but RBS warned its 850,000 business customers last month that it may have to charge them for deposits given persistently low interest rates.

Davies said the letter to business customers was a “bureaucratic exercise” that was misunderstood and that charging financial institutions put RBS in line with some other banks.

“You have to protect yourself against a position where you have a large inflow of cash and you are not charging anything and you have to put it with a central bank that is charging you.”

Negative rates can have unforeseen effects such as pumping up asset prices and putting bank profits under strain. Critics have argued that loose monetary policy is ineffective on its own and that government needs to step in by spending on infrastructure projects.

There is no indication that any high street bank is considering charging retail customers for putting money on deposit. Such a move would be deeply unpopular with savers, who have paid the price for ultra-low interest rates since the BoE cut borrowing costs following the financial crisis.

Santander, whose 123 account had paid 3% on sums up to £20,000, halved the rate last week, blaming the prospect of prolonged low interest rates and increased costs for the banking industry. Other banks are paying little or nothing on savings with instant access or short notice periods.

Barclays cut its “everyday saver” rate on Friday to 0.05% from 0.25%, joining other banks – such as HSBC’s First Direct – in imposing large cuts to savings rates.

Bank branch closures trigger high street alarm bells

The big banks have shut 1,700 branches across the UK in the last five years with many more planned. Those counting the cost will be small businesses and the elderly, campaigners warn

When the shutters come down on the Barclays branch in Bexley in a fortnight’s time, the south-east London suburb will be left without a high street bank.

Nine customers used the branch “regularly” over the last 12 months without interacting with the bank in any other way, Barclays told locals as it prepared for the closure, which was delayed by six months because repairs to a local bridge hindered access to the alternative branch.

It is a situation repeated across the UK, as banks scramble to save costs to bolster profits just as historic low interest rates are punishing their profitability and customers migrate to smartphones and the internet to access their accounts.

In Dinas Powys, just outside Cardiff, the NatWest branch is also the last remaining on the high street – it would have closed in August if it were not for problems at the designated alternative branch. NatWest, which is owned by the bailed-out Royal Bank of Scotland, pointed to a 56% fall in transactions at the branch since 2011.

Local Plaid Cymru councillor Chris Franks said there were concerns for local business people – not just individuals – about how they can pay in cash. “The irony is not lost on people that the public purse has paid a fortune for these banks and they are now abandoning taxpayers,” said Franks. RBS argues it reviews each branch on a case-by-case basis.

About 1,500 communities have already been left without a bank on their high street, according to the Campaign for Community Banking Service (CCBS), which predicts an inexorable decline in the number of branches.

One of the findings of the Competition and Markets Authority (CMA) investigation into high street banking competition published earlier this month, was that a branch network was no longer a barrier to entry for challengers to the “big four” – Lloyds Banking Group, Royal Bank of Scotland, HSBC and Barclays.

bank branch closure graphic

“Previous reviews have found the authorisation process for banks, the cost of IT and access to branches as barriers to entry or expansion in retail banking. We no longer find this to be the case,” the CMA said.

Along with Santander, the big four have closed an estimated 1,700 branches in the last five years.When bailed-out Lloyds, the owner of Halifax and Bank of Scotland (HBOS), announced 200 unit closures last month it said use of branches had fallen by 15% year on year.

Some new branches have appeared. Metro Bank was, in 2010, the first startup to open on high streets for more than a century and now has 41 branches. Both Lloyds and RBS were forced to carve out branch networks as a penalty from the EU for their taxpayer bailouts. The network created – TSB – is owned by Sabadell and now has 598 branches compared with 631 when it started. RBS has abandoned attempts to spin out its 300 branches of Williams & Glyn and is looking for a trade buyer.

However, Age UK, the charity which works with older people, is concerned. Journeys to branches are getting longer and for some older people not ready to embrace digital, there are other consequences. “Small business will also take fright of having to go long distances to a bank,” a spokesman for Age UK said. That could prompt an exodus of other businesses from high streets.

“We’re asking [older] people to lead more independent lives in the community and then cutting it away,” the Age UK spokesman said.

Last year, the industry was forced to agree to a “protocol” that requires them to publish impact statements with information about counter usage, regular customers and location of the nearest alternative bank, cash machine and Post Office. This is currently under review, with the outcome expected in the autumn.

Nick Kennett, financial services director at the Post Office, said that when each branch closes, discussions are held about the services the Post Office can offer over its 11,500 counters. Customers of different banks at present have access to different services. He is working on a standardised service, by January, that means when each bank closes, cash withdrawals, deposit enquiries and deposit services are available for customers and small businesses to get small change.

Campaigners against branch closures have long argued that branch sharing would be a solution. Derek French, who has run the CCBS since 1998, is now closing the website down. While he agrees with analysis by the consultancy CACI, cited by the CMA, that it is possible that just 600 branches will “deliver effective nationwide customer coverage in five years’ time”, he thinks there will still be a need for banking services through other outlets.

The banks themselves argue that branches will remain. Barclays said: “The number of physical Barclays branches will reduce overall but our branch network and the colleagues who work in them remain a vital part of our offering”.

First Direct wins gold for customer satisfaction

MoneySavingExpert survey on current account providers puts First Direct parent HSBC in last place

First Direct has been voted the best bank for customer service in a new poll – but HSBC, its parent company, was ranked the worst. More than 8,000 users of Martin Lewis’s MoneySavingExpert website took part in the survey, which is carried out twice a year. It focuses on what people think about the service offered by their current account provider, and excludes some of the smaller players because a minimum number of votes are required.

Once again, First Direct topped the poll with 91% of those customers who voted rating its service as “great”. Only 6% said it was “OK” and just 3% described the service as “poor”.

MoneySavingExpert said First Direct had comprehensively trounced its rivals by winning every banking service poll it had ever conducted.

Nationwide came in second with a 79% “great” score, with the Co-operative Bank and its Smile online brand in third place with 72%. Santander and TSB were just behind, each scoring 71%.

In last place was HSBC, which took over ownership of First Direct in 1992 when the former bought Midland Bank. MoneySavingExpert said HSBC had been ranked as the “worst” current account provider, coming 13th out of 13, with only 38% of those who voted rating its service as “great”. Of the remainder, 44% said the service was “OK”, while 18% called it “poor”.

In the last survey, six months ago, HSBC came 11th and Barclays was at the bottom. This time, Barclays came 12th, with 43% of customers who voted describing the service as “great” and 21% saying it was “poor”.

First Direct also came joint top in the most recent survey of bank customer satisfaction carried out by consumer body Which?, achieving 82%. Norwich & Peterborough building society managed the same score. In that poll, HSBC achieved a customer score of 58%, putting it ahead of several high-street rivals including NatWest and Barclays.

Guy Anker, managing editor of MoneySavingExpert, said the events of the last few days, with Santander slashing the rate of interest on its popular 123 current account by half, and other banks threatening cuts, “show the importance of keeping on top of your current account”.

He added: “Our index shows once again the strength of First Direct’s service. However, the bottom of the pile is dominated by many high-street banks. This should be seen as a stark warning that they risk losing customers if they don’t raise their game.

“Anyone unhappy with the service they are getting from their bank needs to ditch it, especially as some of the best deals are from banks with good service. Switching is no longer the chore it used to be – all your direct debits and standing orders can be moved within seven working days, and any payments made in error to your old account will be auto-forwarded.”

The website quoted HSBC as saying it was “disappointed to hear the results from the latest MoneySavingExpert poll”. The bank added: “We always want to provide the best possible experience for our customers, and we welcome the opportunity to hear how we could improve their experience when banking with HSBC.”

RBS to charge major financial institutions for holding their cash

Bank charge on sterling trading deposits represents first move towards negative interest rates since Bank of England cut base rate

Royal Bank of Scotland is to start charging major financial institutions for any cash it holds on their behalf for trading purposes, in the latest illustration of the impact of Mark Carney’s post-Brexit vote stimulus package.

It is the first time a bank has started to make charges for sterling deposits since the governor of the Bank of England announced on 4 August that interest rates would be cut from 0.5% to 0.25% to stave off any economic downturn following the vote to leave the EU. Carney said he was not a fan of negative rates.

Even so, from Monday, about 70 RBS customers will start to receive negative rates because they will charged for any cash they place as collateral for trading in complex financial products, such as futures or options. The move will not affect the small business customers whom the bank, and its NatWest arm, warned last month it may have to charge for making deposits.

Negative rates, though, will be applied for customers who trade through RBS on deals guaranteed by clearing houses. RBS is 73% owned by the taxpayer.

An RBS spokesman said: “Until recently, RBS has applied a 0% floor to the overnight rate charged for deposits required by clearing houses for futures trades. However, due to the sustained low interest rate environment, RBS will now be passing the cost of holding such deposits on to a limited number of our institutional clients. Futures are entered into by sophisticated financial investors looking to hedge risk.”

While the rate cut has reduced borrowing rates for mortgage customers, savers are paying a price.

“We are still a long way from banks imposing negative interest rates on personal customers, which would be a deeply unpopular move, though clearly the direction of travel is concerning for savers,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.

A table of savings rates compiled by Savings Champion, a consumer website, shows the lowest rate offered at 0% by specialist bank Weatherbys for a 45-day and 90-day notice account. Other accounts are offering 0.01% – such as that offered by Danske Bank – while Barclays on Friday announced it would cut its “everyday savers” rate to 0.05% on 1 December.

The rate was previously 0.25% on this account although Susan Hannums of Savings Champion said Barclays was transferring some savers to this account who had previously been getting 1%. “This means the savers who originally were in the [previous account] will see their rate drop from 1% to 0.05% in less than 2 months,” said Hannums. The rate was for customers who joined Barclays when it bought the UK arm of ING.

Barclays joined other banks – such as HSBC’s First Direct – in passing on a cut to savings rates that was larger than the Bank of England’s quarter point reduction. For instance, the rate on an instant cash ISA will fall from 0.8% to 0.4%.

It was reported on Friday that the Bank of Ireland, which is 14% owned by the state, will charge big companies 0.4% to place deposits overnight. Rates are negative in the eurozone.

ONS data shows UK wealth wedded to property

Data reveals UK net worth of £8.8tn is four times that of 1995 after massive rise in property wealth, but stellar rise masks public deficit and decline in savings

Britain’s obsession with property has sent the country’s net worth soaring to an estimated £8.8tn, an increase of 6% (£493bn) compared with the end of 2014.

A surge in house prices in 2015 offset the UK’s decline in savings, the slow recovery of the banking sector and the government’s growing debt mountain.

Overall, house prices increased by 7% in 2015 to add a further £355bn to the already huge value locked up in Britain’s homes. The Office for National Statistics said in its annual assessment of Britain’s assets and liabilities that the value of dwellings was estimated at £5.5tn at the end of 2015, more than four times their estimated value in 1995, when the figure touched £1.2tn.

A more recent survey of house prices for June puts the growth rate at 8.7%.

Such is the stellar rise in property prices that the figure for the UK’s total net worth more than tripled between 1995 and 2015, an increase of £6tn, equivalent to an average increase of £87,000 per person, said the ONS. Factories and office blocks add a further £2tn to the value of UK property.

The boost to property contrasts with the state of the country’s more liquid financial assets, such as shareholdings, employee stock options, savings and pensions. The financial holdings of British households and companies are vast, but overshadowed by the borrowing and the liabilities attached to the assets. So while private pension funds have accumulated billions of pounds in assets, these are weighed down by the demands on them from current and future pensioners, more than cancelling them out.

The state balance sheet makes up another slice of the UK’s assets and in 1995, central government could boast that its assets and liabilities were in balance, but the growing cost of pensioner benefits and the financial crash have thrown red ink all this benign picture and created a £1.5tn deficit.

Part of the financial cost of the 2008 banking collapse was the money ministers spent bailing out financial institutions, which were burdened by bad property loans, and the property industry itself. Bankruptcies were avoided and many jobs saved, but at a huge cost to the taxpayer.

In contrast to the US, where many banks and property developers were allowed to go bust, in effect writing off the bad loans, UK banks and property companies were bailed out. The effect was that a short sharp fall in property values in 2008 was transformed into a boom that has lasted from 2012 to the present.

The ONS figures show that the growth of UK’s property and fixed asset values outstripped that of all other G7 countries while Britain’s total financial assets – collecting together the financial assets of households, the government and companies - put in the worst performance in the G7.

Japan had the highest financial net worth in the G7 at £1.9tn while the UK and Italy had the lowest, both at minus £0.3tn.

8 Business Ideas for Couples

8 Business Ideas for Couples

It's not easy to run a business with your spouse or significant other. But for couples who have built up a solid foundation and who know how to handle conflict with each other, small business ownership could be a step toward financial independence and even a stronger relationship. 

If you and your partner have made the decision to start a business together, you can choose from plenty of startups that are well suited for a two-person team. As with any partnership, these business ideas work best when you each take on roles that best fit your skills and strengths. An entrepreneurial relationship, like all business ventures, is truly a labor of love.

Catering

Some couples constantly fight over who has to cook dinner, but for others, preparing and sharing a meal together is an enjoyable bonding activity. If you and your partner fall into the latter category — and, of course, you're actually good cooks — you may want to consider starting your own catering business. Let the resident gourmand take care of most of the food prep, while the other serves as customer service rep and sous chef.

Food truck vendors

For those foodies who also love to travel together, consider opening up shop as a food truck vendor. Whether its music festivals, block parties, or private events, food trucks are a great way to make some extra money while traveling and meeting new, interesting people. For many food truck vendors, the freedom of the open road and the appeal of their favorite activities has led them to strike out on their own; doing exactly that with the person you love might just be the best way to see the world together.

E-commerce retailers

Crafty couples who share a passion for DIY projects can launch a successful e-commerce business on platforms like Etsy or Zibbet. One of you can handle marketing; the other can handle customer service, and both of you can work together to fill your orders. Not only does e-commerce represent a money-making opportunity, it also offers you and your partner a chance to be creative together; what's better than having fun while turning a profit? [See Related Story: Best E-Commerce Software for Small Businesses]

Fitness instruction

If you're the type of couple that goes running and hits the gym together, launching a fitness business could be right for you. Whether you're interested in personal training or class instruction, you can become certified through organizations like the Aerobics and Fitness Association of America, and begin taking on clients. If you both specialize in the same area, you can double the number of sessions or classes you book. Alternatively, if one of you is a personal trainer and the other teaches a class, you can expand your client base through your service variety.

Home cleaning service

For working parents with long hours, cleaning the house can quickly fall to the bottom of the to-do list. Offer your weekends and evenings to these families, for everything from light housework like vacuuming and dusting to heavy-duty chores like cleaning the kitchen and bathroom. With you and your partner working as a team, you'll be able to get these tasks done twice as quickly.

Pet sitting

Do you and your partner love animals? Spread the word to friends and neighbors that you're available to watch their pets while the owners go on a vacation or weekend trip. Pet owners often feel more comfortable leaving their furry friends in the care of a trusted homeowner rather than placing pets in a boarding facility, so getting referrals shouldn't be too difficult. Offering two caretakers also means more individualized attention for your clients' pets, which can be a great selling point.

Tutoring

SAT prep and subject-help tutoring are just as in-demand as ever for students across the country. With strong teaching skills, a wealth of knowledge and great personalities, you and your partner can make extra money educating local students in your home. While self-employed tutors are usually solopreneurs, this business can be even more lucrative for a couple if both of you can tutor. Otherwise, one of you can do the actual tutoring, while the other focuses on marketing and spreading the word.

Yard and garden consulting

Are you and your partner master gardeners? Do you love spending time improving your yard and growing your own veggies? Take your talents on the road and help others do the same! If you have green-thumb, there are plenty of homeowners willing to pay for your advice on what crops to grow and where; help turn a hum-drum backyard garden into a real Eden. Beyond gardening, you can help homeowners create a more environmentally friendly backyard, by helping them install rain gardens, rain barrels, and compost piles. These types of services are becoming more and more popular as people increasingly become conscientious about their environmental footprint.

Co-op bank says Brexit fallout has put recovery plan under threat

Revealing a narrowed first-half loss of £177m, bank says uncertain economic outlook is depleting its capital reserves

The Co-operative Bank warned that the economic impact of the Brexit vote was a threat to its recovery plans as the troubled lender revealed a narrowed first-half loss of £177m.

The bank said the uncertain economic backdrop was depleting its capital reserves – a key cushion against financial instability. It warned that the potential for higher unemployment and falling house prices in the aftermath of the EU referendum could also damage its prospects.

Losses before tax narrowed in the first half of the year to £177m from £204m in the same period last year, but the bank’s chief executive, Niall Booker, warned it was still facing considerable challenges.

“Addressing the bank’s historic legacy issues will continue to impact our overall financial performance until the end of our plan period. While losses have reduced year on year, the potential for headwinds in the economy as a whole presents further challenges,” he said.

Booker said all high street lenders faced a challenge from the referendum’s consequences, including the Bank of England’s decision to cut interest rates to 0.25%, which makes it harder for banks to generate profits.

“Today’s market conditions are challenging for all retail-focused banks and the macroeconomic uncertainty following the result of the EU referendum, including the likelihood of lower for longer interest rates, may restrict our ability to grow revenue in the short term,” he said.

The Co-op bank’s chief executive, Niall Booker. Photograph: Newsteam/Co-operative Bank/PA

The bank is midway through a five-year turnaround plan and has been cutting jobs in an effort to lower costs.

It closed 54 bank branches in the first half of 2016 as customers increasingly prefer to do transactions online or by telephone. A further five closures are planned during the second half of the year, leaving the Co-op Bank with 105 branches.

It nearly collapsed in 2013 after losses from bad debts on commercial property opened up a £1.5bn hole in its finances. Bondholders took control of the bank, turning its longstanding owner, the Co-operative Group, into a minority shareholder. Its financial woes were compounded by revelations that its former chairman, Paul Flowers, took class A drugs.

The bank’s core tier one ratio – the main measure of the cushion of capital that a bank holds – fell to 13.4% at the end of June from 15.5% at the end of 2015 as losses eroded its capital pile.

Losses in the first half were lessened by a one-off £58m gain from the sale of the bank’s share in Visa Europe.

The Co-operative Group is still the largest shareholder in the bank, with a 20% stake. Its biggest institutional investors are the US hedge funds Silver Point Capital, GoldenTree Asset Management, and Perry Capital.

The group has taken up its right to appoint a non-executive to the bank’s board, with Alistair Asher taking on the role from 12 September.

The bank confirmed that its deputy chief executive, Liam Coleman, would replace Booker in the top job at the end of year.

Dennis Holt, the bank’s chairman, said: “Following the appointment of Liam Coleman as deputy chief executive on 3 May 2016, I am pleased to confirm that Liam will succeed Niall Booker as chief executive, subject to regulatory approval, when Niall’s contract with the bank expires on 31 December 2016 following a planned handover during the fourth quarter of 2016.”

The number of current accounts held at the bank fell to 1.422m at the end of June, from 1.43m a year earlier.

Booker said that although the economic outlook was more uncertain following the vote to leave the EU, there had been no noticeable drop in the number of people applying for a mortgage.

He said it was impossible to put a number on what the Brexit vote might mean for the future profitability of the bank because it was “still too murky”.